Summary
Atmos Energy Corp. (ATO) filed an 8-K on November 14, 2005, detailing significant executive compensation adjustments and a new credit agreement. The company's Board of Directors approved bonuses for fiscal year 2005, based on an earnings per share (EPS) achievement of $1.72, with specific amounts listed for the CEO and four other named executive officers. These bonuses could be paid in cash or converted to restricted stock or stock options. Additionally, the CEO received a special grant of 20,000 shares of restricted stock. The company also approved increases to the base salaries of these named executive officers for the 2006 calendar year.
Key Highlights
- 1Fiscal 2005 bonuses approved for named executive officers based on achieving $1.72 EPS.
- 2CEO Robert W. Best received a $494,900 bonus and a special grant of 20,000 restricted shares.
- 3Executive base salaries were increased for calendar year 2006.
- 4A new $300 million, 364-day Revolving Credit Agreement was entered into on November 10, 2005.
- 5This new credit facility supplements an existing $600 million working capital facility.
- 6The credit agreement has a debt-to-capitalization ratio covenant of not exceeding 0.70 to 1.00.
- 7Interest rates on borrowings under the new credit facility are based on LIBOR or a base rate plus a spread, dependent on credit ratings.
Frequently Asked Questions
The primary performance goal for Fiscal 2005 bonuses was the company's return on equity, specifically expressed as earnings per share (EPS). The bonuses were awarded based on the company achieving an EPS of $1.72 for the fiscal year.
The $300 million Revolving Credit Agreement, a 364-day facility, is intended to provide additional working capital to Atmos Energy. It supplements the company's existing $600 million working capital facility.
Yes, the credit facility includes a covenant that limits the company's debt to capitalization ratio to be less than or equal to 0.70 to 1.00 as of the last day of each fiscal quarter during the term of the facility. It also contains usual and customary covenants limiting liens, substantial asset sales, and mergers.
Bonuses for Fiscal 2005 were performance-based and paid in cash or convertible to restricted stock/options, with a special restricted stock grant for the CEO. Base salary increases were approved for calendar year 2006, representing a planned adjustment to ongoing compensation.